INSBANK Parent InsCorp Reports Q3 Profits

Board of Directors of Nashville-Based Lender Approves Semi-Annual Dividend

NASHVILLE, Tenn., Oct. 31, 2022 /PRNewswire/ -- Today InsCorp (OTCQX:IBTN) reported a third quarter net profit of $2,566,000 or, $0.89 per share, representing a 58% increase over the third quarter of 2021. Year-to-date earnings are $8,017,000, or $2.79 per share. At the bank-level, net interest income for the quarter was $6,705,000, which was a 26.5% increase over the prior year same quarter, and a 14% increase over the second quarter of 2022. Driving operating income for the quarter was both expansion of net interest margin as well as loan growth. During the quarter loans grew $20 million, or at an annualized rate of 13%. Net interest margin improved by virtue of loan growth and asset yields increasing more than funding costs. Operating income before tax at the bank-level, excluding one-time gains, was $3,681,000, as compared to $2,941,000 during the second quarter of the year. "We're pleased with the trajectory of our quarterly results, as our team grew our portfolio while preparing for a core system conversion and upgrade", said Jim Rieniets, President & CEO of INSBANK. "With significant year-to-date rate increases beginning to impact borrowers' decisions and affecting depositors' behaviors, the coming quarters are likely to see shifts in loan demand and greater deposit competition across the industry, both of which we have contemplated in our planning," Rieniets continued.

Interest-bearing deposit balances increased modestly during the quarter, while transaction account balances decreased slightly. The cost of interest-bearing deposits was 1.17%, increasing from 0.66% the prior quarter. Bank-level quarterly operating expenses of $3,315,000 equated to 1.81% of assets, and contributed to an efficiency ratio of 46.4%, which compares favorably to the bank's historical peer group average. Asset quality measures remained strong with non-performing assets of 0.38% and past due loans totaling 0.03%. "We, like most bankers, are preparing for some level of adversity given the conditions precedent to a potential nationwide recession," said Jim Rieniets. "While we approach this environment with some caution, our primary commercial market in Nashville continues to grow, as does demand for nationwide, physician-based healthcare financing as served by our Medquity division."

The board of directors also recently approved the payment of a semi-annual dividend. InsCorp shareholders of record November 18, 2022, will receive a $0.15 dividend payable on December 09, 2022. "With the exception of a pause during the pandemic of 2020, we're proud that InsCorp has steadily increased its dividend while also supporting the bank's growth with retained earnings," added Michael Qualls, Chairman of InsCorp.

Highlights of the quarter and year-over-year include:

• Loans grew $67.6 million or 12.3% as of September 30, 2022, compared to September 30, 2021.
• Total assets grew $42.2 million or 6.5% as of September 30, 2022, compared to September 30, 2021.
• Non-interest bearing deposits grew $7.0 million or 8.6% during the 12 months ended September 30, 2022.
• Non-Interest Expense to Total Average Assets was 1.76% for the quarter ended September 30, 2022, slightly higher than 1.66% for the same period in 2021 and compared favorably to the bank's FDIC peer group average of 2.36%.
• Assets per employee remained strong at $13.62 million, compared to the FDIC peer group of $6.87 million.
• Cost of all interest-bearing funding was 1.29% for the three months ended September 30, 2022, increasing from 0.83% for the same period in 2021.
• Net income before taxes, at the bank level, was $8.69 million after excluding one-time gains on derivative products of $2.84 million at September 30, 2022, compared to $6.31 million at September 30, 2021.
• Quarterly earnings per share were $0.89 for the quarter ended September 30, 2022, compared to $0.55 for the quarter ended September 30, 2021.
• Annualized return on tangible common equity was 18.62% for the nine months ended September 30, 2022.
• The percentage of loans past due and non-accrual to gross loans was 0.38% comparing to peer of 0.36%.
• Net recoveries for the nine months ended September 30, 2022, were $81,000.
• The allowance for loan and lease losses was 1.41% of total loans.
• Accumulated Other Comprehensive Income (AOCI) reflected a loss on the securities portfolio partially offset by gains on interest rate swaps held by the bank for interest rate risk purposes, resulting in a $651,000 decrease in AOCI for the three months ended September 30, 2022.
• The bank's tier 1 capital ratio was 11.75%, while total risk-based capital was 12.97%.
• Tangible book value increased to $21.07 on September 30, 2022, from $18.59 at September 30, 2021.

Since 2000, INSBANK has offered its clients highly personalized service provided by experienced relationship managers, while positioning itself as an innovator, utilizing technologies to deliver those services efficiently and conveniently. In addition to its commercial focused operation, INSBANK operates three divisions, Medquity, TMA Medical Banking and INSBANK Online. Medquity offers healthcare banking solutions to physicians, partnerships, and practices nationwide, while TMA Medical Banking provides banking services specifically to members of the Tennessee Medical Association. INSBANK Online offers nationally available virtual private client services for interest bearing deposits. INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank is headquartered in Nashville at 2106 Crestmoor Road, and has an office in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbank.com

SOURCE INSBANK